Unrest and oil

Unrest and oil
The chase by Greg Bonnell:

Unrest. That’s what’s been missing from the oil story in recent weeks. We’ve been focused squarely on OPEC refusing to cut production as North American producers pump it out as fast as they can. Today, unrest re-enters the narrative – labour strife and armed conflict. That means we have conflicting drivers influencing the trade. Libya is halting output from some oilfields amid armed clashes. In Nigeria, oil workers are on strike as they push for reforms. Meanwhile, OPEC is still talking tough, apparently willing to tolerate prices as low as $40. Mix it all together and WTI is still below $58 a barrel, but it’s fluctuating in a narrow range between gains and losses.

North American futures are pointing to a solid open in the green as heavy hitters like Exxon Mobil and Chevron make gains in the pre-market. We’ll be watching the Canadian energy names carefully at the open. U.S. futures, however, did weaken a touch as the Empire manufacturing survey for December fell unexpectedly.

In Corporate News, we have a report out of Spain that Repsol’s board is meeting today to approve a bid for Talisman. TLM’s shares are up 16% in the New York pre-market. Talisman confirms, again this morning, that it’s in talks with Repsol, but also others.

With so much happening in the Energy space, BNN’s Jameson Berkow takes to the streets of Calgary to take the pulse of Canada’s energy capital. He’ll have live reports throughout the day.

And watch out for Gold. The yellow metal is under selling pressure ahead of the Fed. Bets appear to be mounting that Yellen and Co. are getting closer to raising rates after repeated vows to keep borrowing costs low for a “considerable time.” And it’s those two words that are in the spotlight ahead of Wednesday’s Fed statement. Will they be dropped from Fed speak, thus signaling a hawkish stance on rates? And what does that have to do with Gold? It’s widely accepted, but always debatable, that as rates rise you can expect to see non-income paying Gold fall.

With the precious metal down almost $12 this morning we could see some pressure on mining stocks in Toronto.

At the place where politics and stimulus meet – Japanese voters have re-elected Prime Minister Shinzo Abe’s Liberal Democrats. While that can be read as a vote in support of Abenomics, bear in mind it was a record-lower voter turnout.

Finance Minister Joe Oliver is singing the same tune on the housing market – no bubble, no crash, no dramatic moves to rein in the mortgage market, soft landing. I mention his reprise only in the context of the Bank of Canada saying our homes may be overvalued by up to 30%. That’s why Mr. Oliver is facing questions yet again about what Ottawa plans to do.

One more piece of corporate news before I run off. PetSmart has agreed to a buyout by a consortium that includes the Caisse de dépôt et placement du Québec. The deal is worth $8.3 billion, and I sincerely hope we have some footage of cute puppies to play as we tell this story.

p.s. Fear not dear note readers, my mentor and most excellent BNN newsroom desk neighbour Frances Horodelski returns this Wednesday.

Tax Free Saving Account auditing by the Canada Revenue Agency

Here's what will get your TFSA audited by the Canada Revenue Agency

The Canada Revenue Agency has an audit project targeting Canadians it feels are in the business of trading securities and using their tax free savings accounts to shelter the proceeds. Canadians with too many wins in their TFSA are being targetted by CRA Tax-free savings accounts are increasingly being challenged by Canada Revenue Agency auditors targeting…

The Canada Revenue Agency has an audit project targeting Canadians it feels are in the business of trading securities and using their tax free savings accounts to shelter the proceeds.
 
To determine whether something is operating as a business, the CRA typically weighs eight factors, legal sources say. And although none of the eight factors listed below may be sufficient on its own, a combination of them can lead to an audit, tax and legal experts suggest.

Ultimately, the CRA can say a taxpayer has broken the rules on a balance of probabilities and it’s up to the person to prove otherwise.

The eight factors are:

• Frequency of transactions — a history of extensive buying and selling of securities or of a quick turnover of properties

• Period of ownership — securities are usually owned only for a short period of time

• Knowledge of securities markets — the taxpayer has some knowledge of or experience in the securities markets

• Trading experience — security transactions form a part of a taxpayer’s ordinary business

• Time spent — a substantial part of the taxpayer’s time is spent studying the securities markets and investigating potential purchases

• Financing — security purchases are financed primarily on margin or by some other form of debt

• Advertising – the taxpayer has advertised or otherwise made it known that he is willing to purchase securities

• Nature of the shares - normally speculative in nature or of a non-dividend type